Friday, May 15, 2015
On May 12, the U.S. Department of Justice announced resolution of a disabilities discrimination complaint initiated by residents of a Continuing Care Retirement Community (CCRC) in Virginia.
The resolution includes filing of a complaint and consent order that resolves allegations that Fort Norfolk Retirement Community Inc. (Fort Norfolk) violated the Fair Housing Act by instituting policies that discriminated against residents with disabilities at Harbor’s Edge, a CCRC in Norfolk, Virginia:
The consent order, which still needs to be approved by the court . . . along with a complaint, in the U.S. District Court of the Eastern District of Virginia. The complaint alleges that beginning in May 2011, Fort Norfolk instituted a series of policies that prohibited, and then limited, residents in the assisted living, nursing and memory support units at Harbor’s Edge from dining in dining rooms or attending community events with independent living residents. The complaint also alleges that when residents and family members complained about these policies, Fort Norfolk retaliated against them. In addition, the complaint alleges that Fort Norfolk had polices that discriminated against residents who used motorized wheelchairs by requiring those residents to pay a non-refundable fee, obtain liability insurance and obtain Fort Norfolk’s permission.
Under the consent order, Fort Norfolk will pay $350,000 into a settlement fund to compensate residents and family members who were harmed by these policies. Fort Norfolk will also pay a $40,000 civil penalty to the United States. In addition, Fort Norfolk will appoint a Fair Housing Act compliance officer and will implement a new dining and events policy, a new reasonable accommodation policy and a new motorized wheelchair policy.
There is a history of similar issues arising in other CCRCs. For example, in 2008, in California, CCRC resident Lillian Hyatt initiated, and eventually resolved to her satisfaction, a discrimination claim based on a ban on "walkers" in the dining rooms of her community.
As the average age of residents in CCRCs has increased in recent years, the "appearance" issues are sometimes raised as a marketing or image concern, contrasting sharply with the expectations of individual residents as they age and seek continued access to the full range of services in their community.
Our thanks to Karen Miller, Esq., of Florida, for bringing the recent Virginia case to our attention.
Tuesday, May 12, 2015
We've written on this blog several times about successful prosecutions connected to so-called "off label" drug use, including the use of antipsychotics for agitation in dementia patients. See here and here, for example. Now, courtesy of a New York Times article, there is news of a pharmaceutical company's lawsuit to preempt such prosecutions, raising First Amendment free speech rights as grounds for off-label advocacy:
On Thursday, Amarin Pharma took the unusual step of suing the Food and Drug Administration, arguing that it has a constitutional right to share certain information about its product with doctors, even though the agency did not permit the company to do so. Lawyers for the company said that they believed their case was the first time a manufacturer had pre-emptively sued the agency over the free-speech issue, before it had been accused of any wrongdoing. Other companies have sued the agency only after they have gotten into trouble....
Lawyers for Amarin say the company is not proposing to market Vascepa to a wider population of patients, merely to share with doctors the results of a 2011 company-sponsored clinical trial that showed the drug lowered triglycerides in patients with “persistently high” levels....
More details about the suit available here.
Tuesday, April 28, 2015
According to the Atlanta Journal-Constitution, the "long-time head of [Georgia's] powerful nursing home lobby has resigned after months of internal differences." The resignation appears to be about more than just internal politics, perhaps implicating state ethics. AJC explains:
"The resignation of Jon Howell, first reported by Georgia Health News, came only a few months after he told lawmakers that the industry didn’t need all of the money Gov. Nathan Deal recommended as part of a rate hike for select nursing homes. Several of those nursing homes are owned by one of Deal’s top contributors. But one state official said the 'civil war' within the organization began before this year’s General Assembly session.
The nursing home association is a major player at the statehouse, and owners have a big stake in what happens at the Capitol. The state pays more than $1 billion a year to nursing homes to care for Georgians. Owners have long been politically active, donating big money to state leaders and lawmakers who fund reimbursements. Earlier this year, Deal recommended that select nursing homes get a $27 million a year rate increase, a bump stalled by the Department of Community Health board last year...."
Separate articles in the AJC indicate that federal CMS authorities are now seeking millions of dollars of reimbursement for Medicaid payments made to 34 specific nursing facilities, although whether this claim correlates with the governor's recommended rate increase is not clear from the articles. State officials are reported as disagreeing with the federal CMS ruling that triggers the reimbursement claim.
Recent rate increases recommended by the Georgia governor were rejected by Georgia's General Assembly. Additional coverage on the Georgia nursing home industry's organization is provided by McKnight's Long-Term Care News.
I suspect the Georgia stories are part of a bigger picture. Compare, for example, Al Jazeera's America Tonight report from April 2014 on The Whopping Political Power of the Florida Nursing Home Lobby, describing the nursing homes advocating for placement of children into facility-based care.
Monday, April 20, 2015
Whenever I look at national programs on "hot topics" in healthcare law, I'm seriously impressed by the number of offerings on regulatory compliance issues connected to Medicare and Medicaid payments. There are abundant reasons for this emphasis. Each year the Department of Justice touts its statistics on "recoveries" for False Claim Act cases. For the fiscal year ending September 30, 2014, the DOJ enthusiastically reported its "first annual recovery to exceed $5 billion" in a single year. No wonder health care law is a hot field. And remember, much of the money is connected to senior care in all of its guises.
A recent $1.3 million settlement on a Medicare-related False Claims Act case might seem like small potatoes at first glance. But, I was struck by the fact that it was a DOJ settlement with a (non-profit) Continuing Care Retirement Community. I don't usually think of CCRCs as being a major target of False Claim Act allegations. Details are a bit sparse, but the size of the payment seemed pretty hefty when you consider that Asbury Health Center near Pittsburgh, PA actually "self-disclosed" its violation of Medicare regulations. The DOJ press release on April 15 explains:
"For post-hospital skilled nursing care, Medicare regulations require that a facility obtain a physician certification at the time of admission or as soon thereafter as reasonable and practical. The facility must also obtain a physician recertification within 14 days of admission and every 30 days thereafter. Based on information provided by Asbury, the United States alleged that it had civil claims against Asbury resulting from Medicare payments for post-hospital skilled nursing services that were not supported by physician certifications and recertifications."
Friday, April 10, 2015
ElderLawGuy Jeff Marshall alerted us to this week's ruling by the Third Circuit Court of Appeals, affirming the conviction of Eugene Goldman, M.D. for several counts of taking "kickbacks" for referral of Medicare and Medicaid patients for hospice services. Dr. Goldman's sentence of 51 months, followed by three years of supervised release during which he is barred from practicing medicine, was affirmed. The facts, as set forth in the opinion, are interesting:
"Goldman had a geriatric medicine practice in Northeast Philadelphia. In December 2000, he secured the position of Medical Director of Home Care Hospice ('HCH'). Alex Pugman served as Director of HCH, and his wife, Svetlana Ganetsky, was the Development Executive, responsible for marketing HCH to doctors and other healthcare professionals. According to his contract, Goldman was responsible for quality assurance, consultations, and the occasional meeting. In reality, his job was to refer patients to HCH.
Goldman was paid for the number of patients he referred to HCH and the length of their stay. Early in his relationship with HCH, Goldman was paid $200 per referral. By 2011, he received $400 per referral, with an additional $150 for each patient who stayed longer than a month. Ganetsky paid Goldman each month by check. Between 2002 and 2012, Goldman referred more than 400 Medicare patients to HCH and received approximately $310,000 in return.
In 2006 the FBI and Department of Health & Human Services began investigating HCH for Medicare fraud. The FBI followed up in 2008 by obtaining a search warrant and seizing over 500 boxes of documents and information from HCH’s servers. Shortly after the raid, Ganetsky and Pugman approached the FBI and agreed to cooperate in the investigation. Ganetsky then recorded several meetings at which she paid Goldman for his referrals. Ganetsky made these payments with funds drawn from an account opened by the FBI for the investigation."
Tuesday, April 7, 2015
St. Louis University's Journal of Health Law and Policy has recently released a theme issue, focused on "Health Care Reform, Transition and Transformation in Long-Term Care." A great line-up of articles and authors, including:
- Home & Community-Based Long-Term Services and Supports: Health Reform's Most Enduring Legacy? by Marshall B. Kapp
- Care Coordination for Dually Eligible Beneficiaries, by Katie M. Dean and David C. Grabowski
- The Challenge of Financing Long-Term Care, by Judy Feder
- Rationalizing Home and Community-Based Services Under Medicaid, by Laura D. Hermer
- The Broken Promise of OBRA '87: The Failure to Validate Survey Protocol, by Malcolm J. Harkins III
In addition, there are two relevant Notes written by SLU students:
- Short-Stay, Under Observation. or Inpatient Admission? How CMS' Two Midnight Rule Creates More Confusion and Concern, by Rachel A. Polzin
- Disclosure for Closure? Why the Self-Referral Disclosure Protecol Process Paired with the 60-Day Overpayment Rule Creates More Headaches than Solutions, by Peter J. Eggers
April 7, 2015 in Discrimination, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare, Social Security, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (1) | TrackBack (0)
Tuesday, March 31, 2015
In DeCambre v. Brookline Housing Authority, decided by a federal district court in Massachusetts on March 25, the issue was whether a disabled adult living in Section 8 housing becomes ineligible for the housing subsidy because of disbursements to her from a special needs trust, funded as the result of a personal injury settlement.
Although the court affirmed the Bureau of Hearings and Appeal ruling on her income and expenses, thus disqualifying her for public housing benefits, the court also called for clearer federal guidelines to permit better planning for needy beneficiaries:
"[This case demonstrates the serious problem that beneficiaries of irrevocable trusts face; in particular, those that seek to pour lump-sum settlement funds into irrevocable trusts. But until the rules and regulations are clarified, public housing authorities should provide clear guidance and instruction for potential tenants with regard to their financial planning and spending. A more thorough and thoughtful analysis is required by public housing authorities when determining Section 8 eligibility, until further guidance is provided by the HUD."
Tuesday, March 10, 2015
In Draper v. Colvin, petitioner sought judicial review of SSA's denial of her application for SSI benefits. Her claim was sympathetic, as "[e]ighteen-year-old Stephany Draper suffered a traumatic brain injury in a car accident in June 2006."
In an admittedly "hard line" ruling on March 3, the 8th Circuit rejected her argument that her parents' intent to establish a valid third-party-settled special needs trust, using proceeds from a settlement of a personal injury suit on her behalf, should permit her to claim SSI.
The ruling means that over $400,000 will be treated as "available resources," thus requiring spend down before she would be eligible for benefits. The court explained (minus citations):
Admittedly, some evidence in the record supports Draper's claim that her parents intended to act in their individual capacities. Draper's parents identified themselves individually as settlors and trustees, and the trust document explicitly states that it was established “pursuant to 42 U.S.C. § 1396p(d)(4)(A)," a provision which notes that a third party, such as a parent, must create the special needs trust for the benefit of the disabled person. Nevertheless, as discussed [earlier in the opinion], other facts provide substantial evidence to support the conclusion that Draper's parents acted using the power of attorney when establishing the trust.
The Court continued on to its tough bottom line:
March 10, 2015 in Cognitive Impairment, Estates and Trusts, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Property Management, Social Security, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Monday, March 9, 2015
On Sunday I had the interesting opportunity to be in the audience for the third performance of a new play, The Originalist, at Arena Stage in Washington D.C. Playwright John Strand has given Justice Antonin Scalia center stage and the spotlight for close to two hours, in a play filled with opera, literary references, plenty of legal humor, a few card games, and lots of verbal boxing between the justice and his young, liberal "contra" clerk.
The play makes deft use of Scalia's own words, drawn from opinions and public presentations, and actor Edward Gero wears the robes -- and wields Scalia's weapons -- with authority. Kerry Warren, holds her ground well, both as actress and antagonist in the role of the law clerk. The play concludes in the recent past, as Justice Scalia debates with the clerk the words he will announce from the bench for his dissent on the Defense of Marriage Act (DOMA) case, United States v. Windsor.
The play succeeds especially well in an important goal of the playwright, as identified in a lively post-production Q & A session with the audience. The play encourages serious discussion of what it means to "interpret" the Constitution. Through the voice of the clerk, it also asks whether there is any room for true solutions to emerge in the polarized world of left-right politics.
The Originalist also proved to be surprisingly relevant to themes in this Blog. Scalia is depicted as the aging lion in winter, given to occasional moments of introspection and an intriguing episode of pique (hint: what career aspiration may he have pondered?). At one point he is seen as attempting to justify his intransigence with the observation that he's growing old, a condition for which there is "no cure."
The play -- set in the intimate black box space of the Arlene and Robert Kogod Cradle -- is scheduled to run until April 26.
Tuesday, February 24, 2015
USA Today reports on home care workers "joining a nationwide movement" to raise wages, with rallies planned for "more than 20 cities in the next two weeks."
As described by journalist Paul Davidson,
"Like the fast food workers, the 2 million personal care and home health aides seek a $15 hourly wage and the right to unionize, which is barred in some states. Their median hourly wage is about $9.60 and annual pay averages just $18,600 because many work part-time, according to the Labor Department and National Employment Law Project. That puts the industry among the lowest paying despite fast-growing demand for home-based caregivers to serve aging Baby Boomers over the next decade.
'Home care providers living in poverty don't have a stable standard of living so they can provide quality care,' says Mary Kay Henry, president of the Service Employees International Union, which is spearheading the home care aides' movement and backed the fast-food worker strikes."
According to a representative of "Home Care Association of America, which represented agencies that employ personal-care aides," companies attempt to "balance the ability to keep care affordable with attracting employees."
Thanks to Dickinson Law 3L student Jake Sternberger for pointing me to this news item.
February 24, 2015 in Consumer Information, Discrimination, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, State Cases, State Statutes/Regulations, Statistics | Permalink | Comments (0) | TrackBack (0)
The National Consumer Law Center (NCLC) is offering a free webinar on "Medical Debt: Overview of New IRS Regulations and Industry Best Practices" on March 4, 2015 from 2 to 3 p.m. Eastern Time.
The hosts describe the webinar as follows:
This webinar will present an overview of the IRS final regulations governing financial assistance and collection policies of nonprofit hospitals. The regulations require nonprofit hospitals to have written financial assistance policies; regulate debt collection by nonprofit hospitals and third party
agencies; and prohibit the imposition of "chargemaster" rates to patients eligible for financial assistance.
Find out how to use the regulations to help clients who owe medical debts to nonprofit hospitals and protect them from lawsuits, liens, and credit reporting damage. The webinar will also review the voluntary best practices on medical account resolution issued by the Healthcare Financial Management Association.
Here is the link for REGISTRATION. Thanks to the National Senior Citizens Law Center (soon to be "officially" Justice in Aging) for sharing news of this educational opportunity of clear relevance to older persons and their families.
Friday, February 20, 2015
Seasons 22 Restaurants, with locations in more than ten states nationwide, has a reputation for dining that emphasizes farm-to-table freshness, naturally seasoned cooking, and with a pledge that nothing on the menu is over 475 calories. Cutting edge, and hip.
Not so hip are the allegations by the EEOC that since 2010 the chain "engaged in a nationwide pattern or practice of age discrimination in hiring hourly workers," as described in a lawsuit filed by the EEOC this month:
"According to the lawsuit, various Seasons 52 management hiring officials would travel to new restaurant openings to oversee their staffing. Older, unsuccessful applicants across the nation were given varying explanations for their failure to be hired, including 'too experienced,' the restaurant's desire for a youthful image, looking for 'fresh' employees, and telling applicants that Seasons 52 'wasn't looking for old white guys.'
Age discrimination violates the Age Discrimination in Employment Act (ADEA). The EEOC filed suit Civil Action No. 1:15-cv-20561-JLK, in U.S. District Court for the Southern District of Florida after first attempting to reach a pre-litigation settlement through its conciliation process. The agency seeks monetary relief for applicants denied employment because of their age, the adoption of strong policies and procedures to remedy and prevent age discrimination by Seasons 52, and training on discrimination for its managers and employees.
'This case represents one example of the barriers to hiring that some job applicants face,' said Malcolm S. Medley, district director for the EEOC's Miami District Office. 'Eradicating barriers to employment opportunities is a priority of the Commission.'"
Thanks to students in the Elder Law class at George Washington Law for sharing news of this case, which includes the response by Darden (the parent company) spokesman, denying the allegations and pledging to "defend this claim vigorously."
Wednesday, February 18, 2015
A long-running investigation of a doctor in Illinois for Medicaid and Medicare fraud is coming to a close. Michael Reinstein, "who for decades treated patients in Chicago nursing homes and mental health wards," has pleaded guilty to a felony charge for taking kickbacks from a pharmaceutical company. As detailed by the Chicago Tribune, on February 13, Reinstein admitted prescribing, and thus generating public payment for, various forms of the drug clozapine, widely described as a "risky drug of last resort."
The 71-year old doctor has been the target of the state and federal prosecutors for months, and he's also agreed to pay (which is, of course, different than actually paying) more than $3.7 million in penalties. He may still be able to reduce his prison time from 4 years to 18 months, if he "continues to assist investigators."
The investigation traces as far back as 2009, as detailed by a Chicago-Tribune/ProPublica series that revealed he had prescribed more of the antipsychotic drug in question to patients in "Medicaid's Illinois program in 2007 than all doctors in the Medicaid programs of Texas, Florida and North Carolina combined." Further, the Tribune/ProPublica series pointed to autopsy and court records that showed that, "by 2009, at least three patients under Reinstein's care had died of clozapine intoxication." Reinstein's, and one assumes, the pharmaceutical company's, defense was that the drug could have appropriate, therapeutic effects for patients, beyond the limited "on-label" realm.
Assuming that the government ever sees a dime in repayment, from either the doctor or the drug company, my next question is what happens to that money? At a minimum, shouldn't there be review of the effect of the drugs on these patients, some of whom may have been administered the drug for years? We keep reading that the drugs are "risky," but shouldn't there be evidence of real harm -- or perhaps even benefit -- from the documented "off-label" use? Certainly, prosecutions for off-label drugs are understandable attempts to claw-back, or at least reduce, public expenditures. But isn't more at stake, including the search for relief or workable solutions for patients who are in distress?
In March 2014, for example, Teva Pharmaceutical Industries Ltd., the maker of generic clozapine, reportedly agreed to pay more than $27.6 million to settle state and federal allegations that it induced Reinstein to prescribe the drug. Recovering misspent dollars is important. But I also would like to see evidence of the harm alleged by the government -- or the benefit asserted by the defendants -- from the administration of the drugs. Isn't objective study of the history of these real patients a very proper use of the penalties?
February 18, 2015 in Cognitive Impairment, Consumer Information, Crimes, Dementia/Alzheimer’s, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Medicaid, Medicare, State Cases | Permalink | Comments (0) | TrackBack (0)
Wednesday, February 4, 2015
Part 2 of the provocative New America Media series on "Death of a Black Nursing Home," describes a pervasive, discriminatory impact by states in deciding how to use Medicaid funding for health and long-term care. In "Why Medicaid's Racism Drove Historically Black Nursing Home Bankrupt," Wallace Roberts writes:
"About 90 percent of Lemington’s residents were Medicaid recipients. The industry’s average, however, is 60 percent, so Lemington’s mission of providing care for low-income people from the area put it at a competitive disadvantage.
Lemington’s over-reliance on Medicaid was the principal reason its debt grew from a few hundred thousand dollars in 1984, to more than $10 million, including a $5.5 million mortgage on a new facility in 1984.
Pennsylvania’s Medicaid payments for nursing home reimbursement were too low to enable the home to hire enough trained staff. Lemington’s former human resources director, Kevin Jordan, noted that the home was “always scrambling to cover payroll” and spent lots of money on 'legal fees fighting the union.'”
The article details serious mistakes made by individuals in the operation of Leimington Home for the Aged, but also points to essential problems in Medicaid funding that doomed the facility to failure. The author calls for reforms, including a consistent, national approach to long-term care funding, to eliminate -- or at least reduce -- the potential for misallocation of money by states:
"Although the leadership of Lemington Home must bear the responsibility for those legal judgments and the fate of an important institution, the racist history imbedded in Medicaid’s rules for the past 80 years should share the brunt of the blame for bankruptcies at hundreds of long-term care homes largely serving black, latino and low-income elders.
One needed change would be to award nursing homes in African American, Hispanic and low-income neighborhoods serving large numbers of Medicaid recipients larger “disproportionate share payments.” Under the law, such homes receive additional reimbursements for serving a larger-than-usual proportion of very poverty-level residents. But the higher rate also doesn’t kick in unless a facilty has at least a 90 percent occupancy rate, which many homes like Lemington can’t easily reach. Rules relaxing that standard would bring badly needed revenue to vulnerable homes.
Congress could also require that all nursing homes accept a minimum number of Medicaid patients so as to spread the financial burden.
But to truly do the job, Medicaid should be federalized—taken out of the hands of state and local officials, many of whom use get-tough rhetoric in elections to stigmatize and punish often-deserving people...."
The full articles are interesting -- we will link to any future parts of this bold series.
February 4, 2015 in Current Affairs, Discrimination, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Federal Cases, Federal Statutes/Regulations, Health Care/Long Term Care, Housing, Medicaid, Medicare | Permalink | Comments (0) | TrackBack (0)
Tuesday, February 3, 2015
This Blog has followed the complicated recent history of bankrupt Lemington Home for the Aged, in Pittsburgh, with posts here and here. New America Media, a national association of over 3000 ethnic media organizations, has begun an important, multi-part series examining the "impoverished history of race" in long-term care for persons of color. The Lemington Home becomes a case study. The series is titled The Death of a Black Nursing Home.
"[W]hat happened to Lemington is not uncommon. Researchers at Brown University found that more than 600 other nursing homes in African American, Hispanic and low-income neighborhoods also went bankrupt during this period.
Their study examined the closings of more than 1,700 independent nursing homes between 1999-2009 and found that those located in largely ethnic and low-income communities were more likely to have been closed, mostly because of financial difficulties.
Specifically, nursing homes in the zip codes with the highest percentage of blacks and Latinos were more than one-third more likely to be closed, and the risk of closure in zip codes with the highest level of poverty was more than double that of those in zip codes with the lowest poverty rate."
Observing that "Medicaid homes can't compete" successfully, the article examines reimbursement rates under Medicare and Medicaid and the disproportionate effect of underfunding on minority communities.
"The principal authors of the study, Vincent Mor and Zhanlian Feng, both of Brown at the time (Feng is now at the Research Triangle Institute), noted 'closures were more likely to occur among facilities in states providing lower Medicaid nursing home reimbursement rates.' That left these homes without the resources they needed to compete successfully in an industry experiencing an oversupply of beds and intensified competition....
While Medicaid reimbursement rates vary by state, they are always below Medicare’s reimbursement levels or the fees charged to people who pay for their own care. The demise of Lemington and other nursing homes in minority and low-income neighborhoods is a direct result of this flawed payment scheme. However, large for-profit nursing home chains, some of which are owned by private equity companies and real estate investment trusts, can maximize profits by using expensive and aggressive marketing practices to cherry pick the wealthier residents in a given area while reducing the number of their own Medicaid clients.
Medicaid’s payment structure also has impacted the quality of care in nursing homes with predominantly minority residents."
We will link to the next parts of the series as they become available.
Thursday, January 29, 2015
Third Circuit: Officers & Directors of Bankrupt Nursing Home Liable for "Deepening Insolvency" But Punitive Damages Not Proven re Directors
We reported in December 2013 about the long saga of the Lemington Home for the Aged, a troubled nursing home that sought bankruptcy court protection in 2010. Now, in a 2015 decision by the Third Circuit Court of Appeals, following an appeal from the March 2013 jury verdict that awarded the Home's unsecured creditors a total of $5.75 million, key issues about that damage award are addressed.
Judge Vanaskie, who had taken the lead on an earlier appellate opinion regarding the officers and directors, provided some relief for the five former directors on the nonprofit organization's board, who faced joint and several liability for more than $3.5 million in punitive damages. The opinion begins with a concise summary of the outcome:
"This lawsuit, which concerns the mismanagement of a Pittsburgh-area nursing home and its ensuing bankruptcy, comes before the Court for a third time on appeal. In the present appeal, the Defendants, two former Officers and fourteen former Directors of the nursing home, present several challenges to the jury's verdict, which found them liable for breach of fiduciary duties and deepening insolvency. The jury also imposed punitive damages against the two Officers and five of the Directors.
We will affirm the jury's liability findings and the punitive damages award imposed against the Administrator and the Chief Financial Officer of the nursing home. We will, however, vacate the jury's award of punitive damages against the Defendants who served on the nursing home's Board of Directors. We conclude that the punitive damages award against those Defendants was not supported by evidence sufficient to establish that they acted with 'malice, vindictiveness and a wholly wanton disregard of the rights of others .' Smith v. Renaut, 387 Pa. Super. 299, 564 A.2d 188, 193 (Pa. Super. Ct. 1989) (citations omitted)."
Tuesday, January 27, 2015
The Importance of Checks & Balances in Law Firm Management, Including Handling Of Elder Client Funds
A news release from the U.S. Attorney's Office in Western Virginia provides an important reminder of the importance for every lawyer of having a system of checks and balances for law office management, to prevent any single employee from having unsupervised access or exclusive control over client trust funds. On December 15, 2014, a 34-year-old legal assistant at a law firm in Virginia was sentenced to 24 months in federal prison for stealing more than $183k from an elderly client of the law firm. The lawyer who employed that assistant had been named by the county to serve as the conservator for the elderly woman who became the victim. According to the news release, the attorney "allowed [the legal assistant] to access the elderly woman's bank accounts,...but [the assistant] did not have signature authority on the accounts."
According to the news release, the employer "to date... has repaid $104,990.15." One suspects the law firm (or, its insurer) will have to pay the whole tab, even though the sentencing order imposes an obligation of restitution for the full sum on the legal assistant.
Sunday, November 30, 2014
Justice Department Reaches $437,500 Agreement with City of Ocean Springs, MS to Resolve Disability Discrimination Lawsuit
The Justice Department announced a comprehensive settlement today, resolving a federal civil rights lawsuit against the City of Ocean Springs, Mississippi, for alleged violations of the Americans with Disabilities Act (ADA). Under the proposed consent decree, the City will pay $437,500 in damages to a psychiatric treatment facility that was discriminated against by the City. The decree also requires systemic reforms to the City's land use and zoning practices to eliminate barriers for providers of mental health services to people with disabilities and combat the stigma of mental illness. The complaint, also filed in federal court today, alleges that the City discriminated against Psycamore, LLC, an outpatient psychiatric treatment facility, when it denied a certificate of occupancy and a use permit because Psycamore treats patients with mental illness.
Monday, November 24, 2014
Several high profile incidents, such as those reported here in our Blog and here by the Philadelphia Inquirer, involving attorneys disciplined or convicted of theft of client funds, have triggered proposed changes in Pennsylvania's Rules of Professional Conduct for attorneys. The rule changes proposed by the Pennsylvania Supreme Court's Disciplinary Board include:
- imposing restrictions on an attorney's brokering or offering of "investment products" connected to that lawyer's provision of legal services;
- clarifying the type of financial records that attorneys would be required to maintain and report, regarding their handling of client funds and fiduciary accounts;
- clarifying the obligation of attorneys to cooperate with investigations in a timely fashion;
- clarifying the obligation of suspended, disbarred, or "inactive" attorneys to cease operations and to notify clients "promptly" of the change in their professional status.
The Disciplinary Board called for comments on the proposed rule changes, noting that although individual claims against the Pennsylvania Lawyers Fund for Client Security are confidential, "Fund personnel can attest that from time to time, the number of claims filed against a single attorney will be in double digits and the total compensable loss will amount to millions of dollars." The comment window closed on November 3. 2014.
In recommending changes, the Disciplinary Board noted common threads running through many of the cases, including:
November 24, 2014 in Crimes, Elder Abuse/Guardianship/Conservatorship, Estates and Trusts, Ethical Issues, Federal Cases, Federal Statutes/Regulations, State Cases, State Statutes/Regulations | Permalink | Comments (0) | TrackBack (0)
Monday, October 27, 2014
Last week I was part of a panel hosted by the National Continuing Care Residents' Association (NaCCRA) in Nashville, a component of the larger (much larger!) annual meeting of LeadingAge. The theme for the panel was "Resident Engagement in Continuing Care Life" and for my part of the panel, I used an interesting Third Circuit bankruptcy court decision, In re Lemington Home for the Aged, to discuss whether residents of financially troubled CCRCs should be treated as entitled to enforce specific fiduciary duties owed by the CCRC owners to creditors generally, even unsecured creditors, fiduciary duties that may give rise to a direct cause of action connected to "deepening insolvency."
Jennifer Young (pictured on the left), a CCRC resident, talked about what it is like to "be" an unsecured creditor in a CCRC's Chapter 11 bankruptcy court proceeding. Her explanation of how creditors' committees operate in bankruptcy court (including how they hire legal counsel and how that counsel is paid out of the Debtor's estate) was both practical and illuminating. The closing speaker on the panel was Jack Cumming (below left). Jack's has deep experience as an actuary and a CCRC resident. He noted the disconnect between the intentions of providers and the realities faced by residents and called for stronger accountability in investment of resident fees. I always come away from my time with Jack with lots to think about. Our moderator was NaCCRA president Daniel Seeger (right), from Pennswood Village in Pennsylvania.
In my final comments, I reminded our audience that even though our panel was focusing on "problems" with certain CCRC operations, including some multi-site facilities, many (indeed most) CCRCs are on sound financial footing, especially as occupancy numbers rebound in several regions of the country. Both panelists and audience members emphasized, however, that for CCRCs to be able to attract new residents, the responsibility of the CCRC industry must improve. For more on these financial points, go to NaCCRA's great educational website, that includes both text and videos, here.
Interestingly, during the LeadingAge programming that began on Saturday, October 18 and continued through October 22, I was hearing a lot about a potentially major shift in the long-term housing and service market. Some of the largest attendance was for deep-dive sessions on new service models for "Continuing Care at Home," sometimes shortened to CCAH or CCaH. CCAH is often seen as a way for more traditional CCRCs to broaden their client base, particularly in the face of occupancy challenges that began with the financial crisis of 2008-2010.
As a corollary of this observation about market change, one of the topics under debate within the leadership of LeadingAge is whether Continuing Care Retirement Communities need a new name, and I can see movement to adopt a name that aligns better with the larger menu of non-facility based services that many providers are seeking to offer.
Of course, as a law professor, I wonder what these market changes mean for oversight or regulation of new models. Not all states are keeping up with the changes in the Continuing Care industry, and name changes may complicate or obscure the most important regulatory questions.